22 March 2021

1) The U.S. Department of Justice has launched an antitrust investigation into the practices of renowned credit card company Visa regarding debit-card transactions. The DOJ is looking into the rules for routing transactions, both in stores and online. In its suit against Visa last year, the Justice Department claimed Visa already possesses monopoly power in the market for online debit-card transactions, arguing that roughly 70% of such transactions in the U.S. are routed over the firm’s network. At the heart of the Justice Department’s issues with Visa is the 2010 law known as the Durbin Amendment, which requires banks to include two networks on their debit cards. Merchants are then supposed to be given the choice of routing over a major network versus a smaller alternative such as Pulse, Star or NYCE. Those alternative networks can be cheaper for merchants.

2) The Federal Reserve stated that while the U.S. economy has been steadily rebounding from the pandemic recession, the recovery is far from complete and needs continued support from the Fed. About half the 20 million jobs that were lost to the pandemic have been recovered, and the outlook is brightening as vaccinations are more widely administered. The central bank’s policymakers forecasts are sharply upgraded, with the economy expected to accelerate quickly this year. At the same time, their forecast showed that the benchmark rate remains near zero through 2023, despite concerns in financial markets about potentially higher inflation.

3) Flipping houses in America is an easy way to make a quick buck. With the real-estate market red hot, profits on flips are at a record high, averaging some $66,000 per home. There are more than 60 banks and other financing companies catering to flippers. Memories of the 2007 real-estate bust are fading, and with interest rates on most fixed income investments still so paltry, lenders are desperate for anything that provides higher returns. The 7.9% average annual rate on a fix-and-flip loan is more than twice the 3.09% rate that a bank can earn on a 30-year mortgage. But there aren’t that many houses to purchase, the inventory of existing homes for sale is at its lowest since 1999, so now more flippers are chasing fewer transactions. Almost 68% of all home flippings last year sold for $300,000 or less.

4) Stock market closings for – 19 MAR 21:

Dow 32,627.97 down by 234.33
Nasdaq 13,215.24 up by 99.07
S&P 500 3913.10 down by 2.36

10 Year Yield: unchanged at 1.75%

9 March 21

1) With the worldwide push for green energy surging, the lithium-ion battery market is projected to hit $1 trillion dollars globally by just 2026. Lithium-ion batteries have been powering smaller devices for years such as smartphones and power tools, but have become paramount in every major electric vehicle, as well as many medical devices. But at this point, about 80% of all lithium-ion cell production is coming out of China. That’s why the EU is pouring in stimulus money for businesses trying to attain energy independence in the lithium powered age of technology. Producing lithium-ion batteries is needed to store renewable energy and power EVs. The rush is on to find new sources to mine high grade lithium as battery prices are climbing.

2) U.S. Steel Corp. has purchased the flat-rolled sheet patents and trademarks for advanced, high-strength steel made by The NanoSteel Co. Inc. of Providence, R.I. These patented proprietary alloys have a nanoscale microstructure, which creates a unique combination of extreme strength and the enhanced formability normally only found in low-strength mild steels. This means the NanoSteel grades can be rolled thinner than other high-strength grades and are designed for automotive and heavy industrial applications where higher strength-to-weight ratios are needed. U.S. Steel reported a loss of $1.2 billion in 2020 but predicted better things for 2021. Earlier this year, the company purchase of an ultramodern mini-mill in Arkansas.

3) The South Dakota Farmers Union is asking their lawmakers to stop the merging of the Department of Agriculture with the Department of Environment and Natural Resources (DENR). The South Dakota governor passed an executive order last year merging the two departments to streamline state government. The farmers content the state’s agriculture industry depends upon the Department of Agriculture remaining a stand-alone agency to best serve the many South Dakota family farmers and ranchers. They consider that invariably there will be conflicts on land use, water issues, or air quality that will involve modern agriculture. There are fears that without a check and balance, technical issues in the agriculture industry will not be fairly resolved, but rather by political influence.

4) Stock market closings for – 8 MAR 21:

Dow 31,802.44 up by 306.14
Nasdaq 12,609.16 down by 310.99
S&P 500 3,821.35 down by 20.59

10 Year Yield: up at 1.60%

Oil: down at $64.93

26 February 2021

1) The pandemic has been especially hard on small business, who don’t have the cash reserves of large corporations. They face a number of challenges they need to meet in order to survive. Here is a brief list of challenges they face- 1) The Ability to Transition to a Digital First World 2) Lack of In-Person Networking Events 3) Forward Planning is Difficult 4) Leaving Brick and Mortar Stores. 5) Lacking Work Life Balance 6) Increased Shipping Costs 7) Lacking Creativity 8) Blips in Production 9) Pressure to Perform 10) Long Term vs. Short Term Content

2) More than 4 million barrels of daily oil output, which is almost 40% of the nation’s crude production, is now offline because of the deep freeze weather. One of the world’s biggest oil refining centers has seen its output drastically cut back. Experts say the market is underestimating the amount of oil production lost in Texas due to the bad weather. Crude oil briefly surged above $65 a barrel, a level not seen since last January. Supply tightness has also soared, where just ten months ago, the price slumped below $16 because of a demand shock caused by Covid-19. Estimates for how long the outages may last have gotten progressively longer as analysts try to figure out the time span involved in thawing out infrastructure, especially in those areas where freezing weather isn’t the norm. That means ever more barrels are being removed from the global market, resulting in a surge in price of crude in other parts of the world.

3) Another long time retailer chain has filed for bankruptcy, as the Covid-19 pandemic makes the retail industry the site of regular closures and financial woes. Now, regional department store Belk, the nation’s largest privately owned department store, can be added to the ‘dead’ list, with the closing of all its stores. The bankruptcy filing for the 133 year old retailer comes about half a decade after the founding Belk family sold the company to its current owners for $3 billion dollars. The pandemic directly resulted in the drastic declines in the retailer’s sales, revenue, and liquidity. Unfortunately, Belk is far from the only shopping mainstay to struggle under the pressures of the pandemic. The company’s bankruptcy plan was filed in a Houston courtroom on Feb. 23, which relieves Belk of $450 million worth of debt and create an infusion of capital for the business.

4) Stock market closings for – 25 FEB 21:

Dow 31,402.01 down by 559.85
Nasdaq 13,119.43 down by 478.53
S&P 500 3,829.34 down by 96.09

10 Year Yield: up at 1.52%

Oil: down at $63.31

17 February 2021

1) General Motors boldly announced plans to make only battery-powered vehicles by 2035, breaking from more than a century of internal combustion engines. However, the future for 50,000 GM workers, whose jobs could become obsolete far sooner than they realize, was not considered. The manufacturing of electric cars is simpler than conventional cars, which means fewer man-hours to make and therefore fewer jobs. Ford and Volkswagen executives estimate that EVs will reduce labor hours per vehicle by 30%. Electric vehicles contain 30% to 40% fewer moving parts than petroleum-run vehicles, which also translates into fewer failures, and in turn that also will mean fewer jobs for auto mechanics. Most vulnerable in the transition will be roughly 100,000 workers at plants that make transmissions and engines for gas and diesel vehicles.

2) Apple Inc is increasingly serious about entering the auto market because even though the smartphone is large, it is dwarfed by the opportunities in transportation. The smartphone market is worth about $450 billion dollars, while analyst estimates the global market for new vehicles, including cars, light trucks, commercial vehicles, and semi-trucks to be about $2.8 trillion dollars. There are three criteria that must be met for Apple to enter a market: vertical integration ability, a massive market, and a profitable market. While the vertical integration and massive market conditions are met, profitability is uncertain as the automotive industry has thin operating margins, indeed they’re in the mid-single digits. The electric car maker Tesla Inc is suppose to have margins in the 20% range, but with so many other companies getting into the market, competition will most likely narrow those margins.

3) With the big push to electric vehicles, with their exotic batteries having a finite useful life, new businesses are emerging to deal with salvaging used batteries. Li-Cycle Corp is one of those recyclers who is going public through a merger with the blank-check acquisition company Peridot Acquisition Corp in a deal valued at $1.67 billion dollars. This is a bet on the growing need to recycle used batteries as well increasing demand for lithium-ion power sources for emerging products like electric vehicles. Li-Cycle plans to use $615 million in additional funding to build more facilities to recycle and repurpose batteries. About 1.2 million tons of batteries are expected to end their life cycle in 2025, followed by 3.5 million tons in 2030. Investors are showing increasing interests in companies involved with lithium-ion technology, especially in recycling components which are harmful to the environment.

4) Stock market closings for – 16 FEB 21:

Dow 31,522.75 up by 64.35
Nasdaq 14,047.50 down by 47.98
S&P 500 3,932.59 down by 2.24

10 Year Yield: up at 1.30%

Oil: down at $59.76

12 February 2021

1) A massive winter storm system, a polar vortex, will bring sever winter storm conditions with ice, snow, and very low temperatures to millions of Americans from Texas to New Jersey. Some of the worst weather will be in portions of Arkansas, Tennessee and Kentucky where an ice storm is expected with accumulations exceeding a half inch in some locations. This will likely lead to hazardous travel conditions with accidents, power outages and scattered tree damage. All of this promises huge economic losses for the people and local governments. Plus, there has already been loss of life and no doubt more will unfortunately will be lost.

2) NASA’s experimental ‘RainCube’ satellite is now dead. In mid-2018, NASA launched a tiny CubeSat as a proof of concept experiment to study weather on Earth. The objective was to see if compact satellites could return ‘science-quality data’ at a much lower cost than much larger conventional weather satellites. The RainCube satellite not only outlived its designed three-month lifespan, but it returned a wealth of data that proved useful for researchers. The CubeSat is just the size of a shoebox. RainCube’s mission was to study weather on Earth and show scientists what a tiny satellite could do. It completed its three-month mission… and then another three more months… and then three more. Finally, in late December of 2020, the test satellite died, having outlived and outperformed its design several times over.

3) Bank of America forecast the US dollar will strengthen throughout 2021 for 5 key reasons. 1- After several actions to pump dollars into the US economy, the Federal Reserve is starting to end its ultra-easy money policy and purchases of less assets. 2- Stimulus boost with an additional $1.9 trillion dollar stimulus proposal in a bid to supercharge the US economic recovery. 3- Faster growth with the global economy expected to rebound in 2021with the US growth to handily outpace that of the EU. 4- Dollar shorts as the market continues to short the dollar despite the currency’s recent rally. 5- Return of the safe haven as reversal stands to push more investors into cash positions and away from the risk of the markets. The peak in the market is expected this first quarter with a 10% market correction forecasted to arrive sometime this year and shake investors’ appetite for stocks.

4) Stock market closings for – 11 FEB 21:

Dow 31,430.70 down by 7.10
Nasdaq 14,025.77 up by 53.24
S&P 500 3,916.38 up by 6.50

10 Year Yield: up at 1.16%

Oil: down at $57.92

4 February 2021

1) Two companies, AmSty and Agilyx, have announced the certified circular recycling pathway for polystyrene for recycling has been cleared. Polystyrene waste is currently being transformed from solid form to its liquid feedstock called recycled styrene monomer (RSM) at their joint venture facility, to produce circular recycled products. These products can now be put back into the marketplace with original quality. This is the major advancement in recycling polystyrene waste in a world being overrun by plastic waste.

2) QuantumScape, the solid-state battery company, debuted its stock which soared up 256% in less than a month, but then plunged 60% from the high. The solid-state battery is lighter, has greater energy density, therefore more range, lower cost and faster recharge times. But solid-state battery packs for cars are far from ready. They do away with the liquid electrolyte that makes conventional lithium-ion batteries heavy, as well as being dangerous at high temperatures. Getting solid-state batteries to the market is difficult and will take some time, so battery packs for cars are far from ready. Two things sent the company stock down. First is a January 4 report saying that QuantumScape’s batteries are small and unproven, smaller than an iWatch battery and never tested outside a lab. A few days later, the law firm Gainey McKenna and Egleston announced a class-action lawsuit against QuantumScape on behalf of investors, noting a 40 percent drop in the stock price after the story ran. QuantumScape has made clear the batteries are still in the development stage, with results from testing small prototypes instead of full power packs. Other companies, such as Toyota, General Motors, Samsung, Ford and Hyundai are working and investing in the new battery technology. The solid-state space energy storage field has been dormant for many years but now it is heating up.

3) It’s reported that China has stolen personal data from 80% of Americans using their Chinese hackers. On the news show 60 Minutes on CBS the former director of the US National Counterintelligence and Security Center disclosed that 80% of American adults have had some amount of their personally identifiable information stolen by the Communist Party of China. Furthermore, there are concerns that the Chinese regime is taking all that information about Americans, such as what we eat, how we live, when we exercise and sleep, and combining it with our DNA data. With information about heredity and environment, suddenly they know more about us than we know about ourselves.

4) Stock market closings for – 3 FEB 21:

Dow 30,723.60 up by 36.12
Nasdaq 13,610.54 down by 2.23
S&P 500 3,830.17 up by 3.86

10 Year Yield: up at 1.13%

Oil: down at $55.95

27 January 2021

1) There are growing fears that the long running bull market is about to crumble and collapse. The biggest sign is there are fewer stocks helping to drag benchmarks toward fresh records. When the underlying momentum wanes then we see weaknesses developing under the surface, which is what’s happening now. Fewer stocks are managing to end above their short-term moving averages even as indexes show record closing highs and yet fewer than 45% of their stocks managed to close above their 10-day moving averages.

2) China is working to overtake America by leading the global recovery from the pandemic thereby becoming more influential on the world stage than ever before. And China just might have the momentum and confidence to pull it off. As the world’s second largest economy shrugs off much of the Covid-19 pandemic this last year, China’s economy continues growing while the world crashes into recession. This could mean China’s GDP will exceed the United States later this decade, which will be years earlier than expected. China has outpaced the United States in attracting foreign direct investment for the first time, signing a trade agreement with the European Union giving European companies greater access to China’s1.4 billion consumers. Furthermore, China’s starts the new year without one of its most aggressive political adversaries, the former President Trump. China has sent help to other countries and in the process left many third world countries deeply in debt to China, claiming they are injecting more momentum into growth. But a host of geopolitical challenges, including the clashes over Hong Kong and alleged human rights abuses in China’s Xinjiang region, taking control of islands in the South China Sea and threats to Taiwan have all exacerbated tensions with the West and may stymie efforts to foster multilateral cooperation. These actions are unacceptable to the democratic nations, who are pulling away from China despite its attractiveness as a market.

3) There are fears that Biden’s executive order will aggravate America’s food crisis, by signing an executive order that addresses America’s most pressing economic needs. This order includes measures to blunt the meteoric rise in food insecurity during the pandemic. The order calls on the U.S. Department of Agriculture (USDA) to expand three key food assistance programs, which are the Pandemic Electronic Benefits Transfer (P-EBT), SNAP, and the Thrifty Food Plan.

4) Stock market closings for – 26 JAN 21:
Dow 30,937.04 down by 22.96
Nasdaq 13,626.06 down by 9.93
S&P 500 3,849.62 down by 5.74
10 Year Yield: unchanged at 1.04%
Oil: down at $52.75

26 January 2021

1) Amid rising doubts, both with the Republicans and Democrats, of passing President Biden’s $1.9 trillion dollar coronavirus relief package, some economists call the bill a good step that will help America’s struggling economy and warning that if not passed, then the nation would likely reverted to a recession in early 2021. The $1.9 trillion dollar coronavirus stimulus proposal is designed to jump-start the nation’s sputtering economy as well as accelerate vaccine distribution to control the deadly pandemic. Presently, the plan calls for a one-time $1,400 direct payment to eligible Americans, which would be in addition to the $600 check sent out this month, making a total payment of $2,000. Additionally, there is a supplemental unemployment benefit of $400 a week, up from the present $300 a week.

2) It’s considered that President Biden’s early actions in office will have effects on oil’s outlook, both short and long term. The first actions were revoking approval of the Keystone XL oil pipeline and rejoined the Paris climate agreement. Biden administration’s aim is to reduce long-term oil demand as the move away from fossil fuels accelerates. But if all the promises made by the President this first year are kept, oil demand in 2021 is expected to get a 350,000 barrel-per-day boost. The cancelling of the Keystone pipeline is likely to be muted as other world markets take up the production, because Iran and Venezuela have removed about three million barrels per day production from the current market, with other middle east producers are also cutting back on their production.

3) As the demand for fossil fuels is being limited, people are wondering if the electric car’s moment has arrived at last? While rapid advancement in electric cars and batteries is evident, a shortage of electric car chargers is one of the hurdles EVs face to displace the gas-powered vehicles. Presently, transportation accounts for more than a quarter of U.S. greenhouse gas emissions. Still, the popularity of EVs and hybrid vehicles is already surging. Yet, despite an avalanche of promising news, the shift away from gas-fueled cars remains stubbornly marginal with green vehicles being just 2 percent of the cars sold in the United States. There are electric Hummers, an electric Mustang, and an electric Harley-Davidson motorcycle, with car manufacturers planning to triple the number of non-gas-powered models by 2024 to 203. Ford Motor Co. plans an electric version of its popular F150 pickup. Still roughly 1.5 billion gas-powered cars and trucks are still in operation.

4) Stock market closings for – 25 JAN 21:

Dow 30,960.00 down by 36.98
Nasdaq 13,635.99 up by 92.93
S&P 500 3,855.36 up by 13.89

10 Year Yield: down at 1.04%

Oil: up at $52.88

12 January 2021

1) The cryptocurrency Bitcoin plummets the most since March as a stronger dollar and investor nerves strip off nearly $140 billion in the cryptocurrency market cap, renewing fears that Bitcoin may be a bubble waiting to burst. But Bitcoin is still up roughly 89% over the past month. Other cryptocurrency coins, such as XRP and Litecoin, have shed about 18% each. Bitcoin hit a record high last week above $41,000, driven by the combination a weaker dollar, economic optimism, and a wave of bullish sentiment toward cryptocurrencies as big-name investors and investment banks touted a potential for huge gains this year, with the stronger dollar and higher bond yields triggering a plunge in Bitcoin and gold prices.

2) Trump has been permanently barred from the platform Twitter, resulting in$5 billion dollars in losses in market value, with Twitter stock dropping after the barring of the President. Twitter stated they permanently suspended the account due to the risk of further incitement of violence. Trump, who had about 88 million followers, generated enormous publicity for the platform with his controversial and incendiary tweets over the past six years. As a result, Twitter’s stock fell as much as 12% on Monday thus the decline of $5 billion dollars from Twitter’s market capitalization. Investors are worried that the Trump ban will erode interest in the platform and lead to boycotts among those who see the decision as politically motivated and a way to silence a major conservative voice.

3) Fears are growing that a bigger stimulus may be seen as the ‘peak of this bubble’ resulting in a market correction or worst. Some think that with the Democrats set to take control of both the House and Senate, perhaps President-elect Joe Biden will be less likely to spook markets with tax ambitions. Biden has promised $2,000 stimulus checks if the Senate turned blue, so now the question is what will happen? For millions of Americans, it’s been a painful waiting game already, they having subsisted with minimum money since losing their jobs from the pandemic. Joe Biden made the promise that if Jon Ossoff and Raphael Warnock turned the senate blue that would end the block in Washington and allow the $2,000 stimulus checks to immediately go out the door to people who are in real trouble.

4) Stock market closings for – 11 JAN 21:

Dow 31,008.69 down by 89.28
Nasdaq 13,036.43 down by 165.54
S&P 500 3,799.61 down by 25.07

10 Year Yield: up at 1.13%

Oil: down at $52.18

24 December 2020

1) Just went everyone thought the second stimulus was a done deal, President Trump has made vague threats not to pass it. The President is asking Congress to amend the bill that has passed both chambers, with Trump decrying the bill’s $600 payments and its failure to properly support small businesses. He is now urging lawmakers to boost the $600 check to $2,000 for every American earning less than $75,000 per year. Furthermore, a veto would leave the threat of a government shutdown and expiring Covid-19 protections looming over the holiday season. The President said the bill contains too many provisions unrelated to the pandemic.

2) Threats of a second stimulus bill veto was reinforced with Trump’s veto of the defense bill, in part because of the requirement for renaming bases honoring Confederates and restrictions on the executive’s ability to bring troops home from overseas. Both the House and the Senate are already making plans for a post-Christmas session during which lawmakers plan to override the veto. Congress has until noon on January 3 to do so.

3) There are emerging new signs of economic distress. With the fate of a federal aid package suddenly thrown into doubt by President Trump, economic data on Wednesday shows why the help is so desperately needed. Personal income fell in November for the second straight month, and consumer spending declined for the first time since April, with a worsening pandemic continuing to take a toll on the U.S. economy. Applications for unemployment benefits remained high last week and have risen since early November. Experts know that things are going to get worse, the question is how much more worse. Many economists view direct payments to people as among the least effective measures, because much of the money goes to households that don’t need it. Spending on restaurants and hotels fell with transportation, clothing and gasoline also in declined. The decline in spending is spilling over into the labor market, with about 869,000 people filing new claims for state jobless benefits last week. The relief bill is smaller than many economists say is needed to carry the economy through the pandemic and ensure a robust recovery.

4) Stock market closings for – 23 DEC 20:

Dow 30,129.83 up by 114.32
Nasdaq 12,771.11 down by 36.80
S&P 500 3,690.01 up by 2.75

10 Year Yield: 0.96%

Oil: up at $48.06